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VIRTUAL BANKING

SUBMITTED BY: JAWED AKHTAR JITENDRA PATIDAR KESHAV

VIRTUAL BANKING
INTRODUCTION
Indian Banking industry is witnessing an unprecedented competition. To stay ahead, Banks are coming up with plethora of services to lure customers. Services like 24hour banking, Service at door step, Telephone banking, Internet banking, Extended Business Hours (EBH), Speedy processing are only a few to mention. Greater part of today's bank transactions take place somewhere else other than in branch premises. This shows the growth of "virtual" banks in India. With convenience, speed, efficiency and effectiveness, these virtual banks, in effect have opened up a new world of possibilities and brought major changes in providing a broad range of services. Virtual banks are now seen as an answer to the challenge of designing a new service channel that is fully secure, functional and which customers can readily learn to use and trust it. Virtual banking -- a powerful "value added" tool -- has become the focal point for banks to attract and retain customers. Though, the aim of these services is to satisfy customers, there is a need to understand customer awareness, perception and importantly the level of satisfaction. In this paper we measured these issues on four virtual banking services offered by Indian private banks in Hyderabad city. These services include Automated Teller Machine (ATM), Telephone Banking, Internet Banking and Integrated Voice Response System (IVRS). Based on findings of the study, we conclude that, banks have to do a lot to take advantage of virtual banking services. We also penned down few suggestions that would help banks to provide better service.

DEFINATION:-A virtual bank is an Internet based financial institution that offers deposit and withdrawal facilities, and other banking services, through automated teller machines or other devices, without having a physical (brick and mortar) walk-in premises.

Bank with a very small or nonexistent branch network. Services through the Internet or other electronic channels.

BENEFITS OF VIRTUAL BANKING SERVICES ARE MANIFOLD :

1. Lower cost of handling a transaction. It helps to reduce the cost of handling

transactions as one can perform his transaction without moving too much. Nowadays virtual banking is making it easy for banks to make it easy to perform the job.

2. Lower cost of operating branch network. As we know todays banking is having very
much emphasis on spreading there branches but it is very difficult and costly process and for operating it they need big manpower but when it comes to virtual banking it become very easy to operate because customer can make transaction from anywhere.

3. Increased speed of response to customer requirements. Earlier it was very difficult

to react on customers requirement because the customer base was very big but by the help of virtual banking bank can react in quick succession because it provide an online terminal which connect customer to the relevant section of the bank.

Features Virtual Banking 1. Online Banking 2. Mobile Banking 3. Phone Banking 4. Automatic Taller Machine

1. ONLINE BANKING
Online banking (or Internet banking) allows customers to conduct financial transactions on a secure website operated by their retail or virtual bank, credit union or building society.

FEATURES
Online banking solutions have many features and capabilities in common, but traditionally also have some that are application specific.

The common features fall broadly into several categories

Transactional (e.g., performing a financial transaction such as an account to account transfer, paying a bill, wire transfer, apply for a loan, new account, etc.)

Payments to third parties, including bill payments and telegraphic/wire transfers Funds transfers between a customer's own transactional account and savings accounts Investment purchase or sale Loan applications and transactions, such as repayments of enrollments Non-transactional (e.g., online statements, cheque links, cobrowsing, chat) Viewing recent transactions Downloading bank statements, for example in PDF format Viewing images of paid cheques Financial Institution Administration Management of multiple users having varying levels of authority Transaction approval process

Features commonly unique to Internet banking include

Personal financial management support, such as importing data into personal accounting

software. Some online banking platforms support account aggregation to allow the customers to monitor all of their accounts in one place whether they are with their main bank or with other institutions.

2. PHONE BANKING
Telephone banking is a service provided by a financial institution, which allows its customers to perform transactions over the telephone. Most telephone banking services use an automated phone answering system with phone keypad response or voice recognition capability. To guarantee security, the customer must first authenticate through a numeric or verbal password or through security questions asked by a live representative (see below). With the obvious exception of cash withdrawals and deposits, it offers virtually all the features of an automated teller machine: account balance information and list of latest transactions, electronic bill payments, funds transfers between a customer's accounts, etc. Usually, customers can also speak to a live representative located in a call centre or a branch, although this feature is not always guaranteed to be offered 24/7. In addition to the self-service transactions listed earlier, telephone banking representatives are usually trained to do what was traditionally available only at the branch: loan applications, investment purchases and redemptions, chequebook orders, debit card replacements, change of address, etc. Banks which operate mostly or exclusively by telephone are known as phone banks. They also help modernize the user by using special technology.

FEATURES

1.

BALANCE ENQUERY: - Customer can easily get information by making a call to the bank. It will allow them to know there balance without going to the bank just for the sake of knowing his own balance and wasting time on the queue. ACCOUNT STATEMENT: - one can get his account statement by the help of phone banking one can ask of a/c statement by fax either for all the transaction or for same specific transaction. TRANSACTION DETAIL: - if anyone wants to know about his transactions it also could be taken by phone banking.

2.

3.

3. MOBILE BANKING

Mobile banking (also known as M-Banking, mbanking, SMS Banking) is a term used for performing balance checks, account transactions, payments, credit applications and other banking transactions through a mobile device such as a mobile phone or Personal Digital Assistant (PDA). The earliest mobile banking services were offered over SMS. With the introduction of the first primitive smart phones with WAP support enabling the use of the mobile web in 1999, the first European banks started to offer mobile banking on this platform to their customers. Mobile banking has until recently (2010) most often been performed via SMS or the Mobile Web. Apple's initial success with iPhone and the rapid growth of phones based on Google's Android (operating system) have led to increasing use of special client programs, called apps, downloaded to the mobile device.

Automatic alerts: Mobile banking helps to get alerts about the account I.e. the amount deposited, transferred or withdrawn.

SMS request: It will also help to know about balance demand draft status and cheque status.

4. Automated Teller Machine

An automated teller machine (ATM), also known as a Cash Point (which is a trademark of Lloyds TSB), Cash Machine or sometimes a Hole in the Wall in British English, is a computerized telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier, human clerk or bank teller. ATMs are known by various other names including ATM Machine, automatic banking machine, cash machine, and various regional variants derived from trademarks on ATM systems held by particular banks. Invented by IBM, the first ATM was introduced in December 1972 at Lloyds Bank in the UK. On most modern ATMs, the customer is identified by inserting a plastic ATM card with a magnetic stripe or a plastic smart card with a chip, that contains a unique card number and some security information such as an expiration date or CVVC (CVV). Authentication is provided by the customer entering a personal identification number (PIN).

Withdraw cash instantly: - It helps to withdraw cash anywhere and it also removes the headache of carrying money with you.

Withdraw cash across the world through international cards : - it also helps to withdraw money/cash by international card. So it removes not only national barrier but also international barrier.

View mini statement:- It also helps to look past transactions record as well as the balance amount in account by the help of mini statement.

Card to card transfer:- one of the special features of ATM is that you can transfer money from your ATM CARD to someone elses ATM CARD and that person can withdraw the money by using his ATM CARD.

CONCLUSION Virtual banking is changing the banking industry and is having the major effects on banking relationships. The virtual banking, thus, "now is more of a norm rather than an exception in many developed countries" due to the fact that it is the economical way of providing banking services. Banking is now no longer confined to the traditional brick and mortar branches. There is need to scan and analyze the market and respond to the needs of customers and to generate awareness regarding advantages of Virtual banking. Providing Virtual banking is increasingly becoming a 'need to have' than a 'nice to have' services.